Nvidia's market value has shrunk by 3 trillion! Liquid cooling, will it be a fig leaf for AI?

Starry Sky Fortune

2024-06-27 17:31Star Fortune official account

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01 AI boss Nvidia's stock price has recently plunged, causing its market value to shrink by 3 trillion.

02 Liquid cooling technology is considered to be the best solution to solve the heat dissipation problem of data centers, but the market competition is fierce.

03The compound annual growth rate of the domestic liquid-cooled server market is expected to exceed 45%, and the market size is expected to reach $10.2 billion in 2028.

04 Inspur Information occupies a dominant position in the domestic liquid-cooled server market, with a year-on-year increase of more than 65% in operating income and net profit attributable to the parent company in the first quarter of this year.

05In addition, Invic and Intel and other players jointly launched the first multi-platform liquid-cooled aluminum cold plate system, paving the way for the large-scale application of liquid-cooled servers and liquid-cooled data centers.

Technical support is provided by Tencent Hybrid Model

Author / Baked buns under the stars

Edit/Spinach's Starry Sky

Typography/Hot dry noodles under the stars

Recently, a major event in the capital market is that the stock price of AI boss Nvidia has plunged.

In fact, emotions and valuations are still twin brothers. According to the analysis of professional institutions, the bears who bet on the decline of Nvidia's stock price have made a total profit of nearly $5 billion in the past few trading days, and this effect is likely to amplify the decline of Nvidia's stock price.

But fundamentally, Nvidia's position seems to be something that no rival can shake. Nvidia's data center GPUs (including AI-oriented GPUs) have shipped more than 3.7 million units, with a market share of nearly 98%, and its share has basically not changed in the past two years. Moreover, Nvidia's data center GPU sales revenue exceeded $36 billion last year, more than three times that of 2022.

Nvidia's decline seems to have affected its younger brothers. For example, as a liquid cooling technology solution provider for GB200 AI GPU servers, Vertiv's stock price has risen by more than 600% since 2023, but the stock price has been falling since the end of May this year, and it has only recently stopped falling.

Changes in the Vertiv share price

After all, many industry players say that liquid cooling technology is the best solution to solve the problems of "computing power" and "heat dissipation anxiety". But is that really the case? Can domestic players seize the opportunity in this wave and turn over? The author will take you to find out today.

1. Don't hesitate to penetrate quickly

There is no doubt that as AI players continue to "involute", algorithms will become more and more complex, and the demand for AI computing power will also grow rapidly. As of the end of last year, the total scale of data center racks in use across the country has exceeded 8.1 million standard racks, with a growth rate of more than 20%. And in the future, the growth rate of intelligent computing power will exceed 30%.

Data center cabinet size

Moreover, high-performance AI chips like the Nvidia GB200 generate a lot of heat when running, which requires more effective heat dissipation solutions. Not to mention NVIDIA, according to the construction of domestic intelligent computing centers, the density of a single cabinet even exceeds 50KW, which is close to the limit of air cooling and heat dissipation.

As a result, heat dissipation technology is transitioning from traditional air cooling to liquid cooling. As the name suggests, liquid cooling is a technology that uses liquid instead of air as a cooling medium to remove heat from heat-generating components. From the perspective of specific technical routes, cold plate liquid cooling technology does not need to change the form of existing servers, and the processing difficulty and cost are relatively low.

Liquid cooling technology

Therefore, liquid cooling technology may be able to occupy a place in application scenarios such as improving computing power, energy efficiency, and deployment density. In addition, the regulatory requirements for PUE (power utilization efficiency) are constantly increasing, and liquid cooling is an effective way to reduce PUE, which can achieve energy savings of at least 20%.

Second, there are many players, and the status is not the same

According to the analysis of professional institutions, in the next five years, the compound annual growth rate of the liquid cooled server market in mainland China will exceed 45%, and the market size will be able to reach 10.2 billion US dollars in 2028. Many players want to enter this field with their heads broken.

If we break down the liquid cooling industry chain, you will find that the upstream is mainly product parts and liquid cooling equipment, the midstream is the supplier of liquid-cooled servers and liquid-cooled switches, and the downstream is a variety of computing power users.

Liquid cooling industry chain

Judging from the situation of liquid-cooled servers alone, the domestic competition pattern is relatively clear, CR3 has been close to 70%, Inspur Information (000977) firmly occupies the top spot in China, announced the "All in liquid cooling" strategy two years ago, deeply cultivated downstream Internet customers, and recently successfully developed the industry's first liquid-cooled server that supports 50°C liquid inlet temperature, and builds a moat with technology.

In the first quarter of this year, Inspur Information's operating income and net profit attributable to the parent company increased by more than 65% year-on-year, mainly due to the increase in customer demand and the growth of server sales.

Liquid-cooled server market size

For the liquid-cooled infrastructure market, the competition is fierce, and there are more players participating. Among them, the author feels that players who have mastered core technologies in the field of key raw materials such as fluorinated liquid and cold plate can often stand out. For example, 3M, Honeywell, etc. Domestic players are also actively hugging the thighs of the big guys, such as 300731Honeywell, which is preparing to cooperate in server siphon heat dissipation technology, liquid cold plate, and immersion liquid cooling technology.

3. Hold your thighs tightly and stay until the mountain flowers are romantic

The so-called soldiers and horses have not arrived, and the grain and grass go first. Although air cooling technology is currently the most widely used heat dissipation technology in data centers, it does not have the strength to wrestle with liquid cooling in scenarios with high heat dissipation density (such as AI clusters and HPC clusters).

The advantages of liquid cooling technology are also obvious, as it can efficiently handle large volumes of data in challenging situations by cooling servers.

Gamers are also looking for their thighs, to talk about hugging thighs, the Vertiv we mentioned at the beginning, because of hugging Nvidia's thighs, the company's total orders in the first quarter increased by 60% year-on-year, and the backlog of orders at the end of the period exceeded $6.3 billion, a record high. In other words, as long as the company's production capacity can keep up, it is just lying down and counting the money. The agency forecasts that Vertiv's full-year sales are expected to grow by more than 10%.

In China, the author took a look around, and the faster growth in performance is Invic (002837), whose refrigeration system serves the ultra-large data center of operators, Internet and other head customers, and the net profit attributable to the parent company increased by 147% in the first quarter of this year.

Recently, Invic has also jointly launched the first multi-platform liquid-cooled aluminum cold plate system with Intel and other players, which fully meets the conditions of standardized batch delivery and large-scale commercialization, and paves the way for the large-scale application of liquid-cooled servers and liquid-cooled data centers in the future.

Note: This article does not constitute any investment advice. The stock market is risky, and you need to be cautious when entering the market. There is no harm in buying and selling.

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